Looking at the nuts and bolts, we see that the spending goes on, even if the mood is ultra-sour.
By Wolf Richter for WOLF STREET.
Retail sales in May, seasonally adjusted, fell by 0.9% from April, and in April they’d dipped a hair from March, but in March they’d spiked by 1.5% from February (red in the chart). So, compared to February, retail sales in May were up by 0.5%. Year-over-year retail sales were up by 3.5%.
Not seasonally adjusted, retail sales jumped by 4.3% in May from April, to $753 billion, the second-highest ever, behind only December 2024 (blue in the chart). Year-over-year, they were up by 3.1% from May 2024.
Seasonal adjustments include an adjustment for the number of “selling days.” In May 2025, there was one more selling day (27 days) than in May 2024 (26 days). So seasonal adjustments subtracted that extra selling day compared to May a year ago. Which is one of the reasons seasonal adjustments were a little harsh in May. But ecommerce retailers, restaurants, and many other retailers were open seven days a week, including Memorial Day, so they were open 31 days in May, same as last year, and these seasonal adjustments can get confusing and uncertain quickly.
The three-month moving average cancels out the month-to-month squiggles and a portion of the seasonal adjustments including those dealing with calendar shifts.
For May, the three-month average – the average of the month-to-month spike in March, the dip in April, and the drop in May – rose by 0.2%, seasonally adjusted.
Note the declines in this trend in late-2023/early-2024, in late 2022, and in the summer of 2021. But not this year so far – though it’s not exactly stellar growth either.
Each of the big categories of retailers has sales dynamics that are different from the others, and so we look at them separately.
New and used vehicle dealers and parts stores (#1 retailer category, 19% of total retail sales):
Not seasonally adjusted, sales fell for the second month in a row, to $146 billion, from the record spike in March, but were still the third-highest level of sales ever, behind only March and April, and up by 2.4% from a year ago.
Seasonally adjusted, sales fell by 3.5% in May from April, but were up by 3.2% from May last year.
March is always one of the best months of the year for vehicle sales – it’s tax refund season and tax refunds were big this year – but this March showed an even bigger jump than normal from February and January, in part because harsh winter weather early in the year had caused people to stay home, and when the sun came out in March, they went shopping.
The other reason cited was the hype about the tariffs, and some people might have tried to speed up their purchases and bring them into March to front-run any effects from the tariffs. But so far, those tariff-effects on prices have remained elusive, and maybe people smartened up and quit chasing after hype?
In terms of new-vehicle unit sales, it had been a huge March, followed by a solid April and May, all three of them the best since 2021, according to data from the Bureau of Economic Analysis earlier in June, based on data from automakers, not surveys of retail stores.
Back to dollar-sales: The three-month average of retail sales at auto dealers and parts stores rose by 0.34% (+4.2% annualized) in May from April, to a new record of $139 billion, seasonally adjusted, up 6.9% from a year ago.
Ecommerce and other nonstore retailers (#2 retailer category, 17% of total retail sales):
Not seasonally adjusted, sales jumped by 6.3% year-over-year to $124 billion.
Seasonally adjusted, sales jumped by 0.9% in May from April, and by 8.2% year-over-year.
There is no sign of weakness here, just growing at a solid pace, tariffs or no tariffs.
Food services and drinking places (#3 category, everything from cafeterias to restaurants and bars, 13% of total retail sales). Most of it is discretionary spending – money that consumers want to spend to enjoy life.
Not seasonally adjusted, sales at these establishments spiked by 6.3% in May from April to a record of $105 billion, up by 6.4% year-over-year. So this looks pretty strong.
Seasonal adjustments whacked that big sales gain down to a big drop – which is somewhat of a headscratcher.
Because the seasonal adjustments are somewhat of a headscratcher, we look at the three-month average, seasonally adjusted, where at least part of the seasonal adjustments cancel each other out.
Three-month average seasonally adjusted sales at food services and drinking places jumped by 0.8% for the month, and by 6.2% year-over-year.
And this is the trend we’ve been seeing all along: Consumers are not backing off from doing stuff they want to do. And the pace of growth picked up in recent months, after flat-lining in late 2024 and early 2025 (maybe due to particularly crappy winter weather and the fires in Los Angeles).
Food and Beverage Stores (#4 category, 12% of total retail sales).
Seasonally adjusted, sales fell by 0.7% in May from April, but were up 2.2% year-over-year.
Not seasonally adjusted, sales jumped in May to $87 billion, and were up by 2.5% from a year ago.
The grocery business is never a high-growth industry. It grows with the population and with price increases, and both of those growth drivers have recently slowed a lot amid a crackdown on illegal immigration, while food inflation has cooled dramatically from the red-hot price increases in 2021 and 2022.
The three-month average shows this trend:
General merchandise stores (#5 category, 11% of total retail sales), including retailers such as Walmart, which is also the largest grocer in the US, but not including their huge ecommerce sales, which are part of “nonstore sales” above:
Not seasonally adjusted, sales jumped by 8.3% in May from April and rose by 3.5% year-over-year to $80 billion.
Seasonally adjusted, sales inched up by 0.1% in May from April and rose by 2.5% year-over-year.
The three-month average of seasonally adjusted sales has been flat for the past four months. But it’s still up by 2.7% year-over-year.
Note the sharp slowdown in sales in the first half of 2023, followed by a bounce-back for three months, followed by three months of flatline. And consumer spending turned out to be fine back in 2023.
Gas stations (#6 category, 7% of total retail sales). Dollar-sales at gas stations move in near-lockstep with the price of gasoline. The price of gasoline started heading lower in mid-2022 and has continued to move lower.
Seasonally adjusted, sales fell by 2.0% in May from April and by 6.8% year-over-year, to $50 billion (red in the chart below).
The CPI for gasoline dopped by 2.6% in May from April and by 12.0% year-over-year (purple).
So people actually bought more gallons of gasoline than they did last year, as gasoline prices have fallen faster than the amounts consumers spent on gasoline. Anyone having to deal with the worsening traffic congestion on their way to work has first-hand experience that more people are driving more and clogging up the streets and highways more.
What we’re looking at here is not a sign of consumers cutting back, but of prices falling because the price of crude oil has plunged – and that’s a good thing for the rest of the economy:
Building materials, garden supply and equipment stores (#7 category, 6% of total retail sales):
This is a very seasonal business, so the seasonal adjustments are huge, and if they’re off just a little bit, it makes a substantial difference. That business boomed during Covid and has since then gradually slowed, and that slowing trend continues, but it’s not smooth.
Not seasonally adjusted, sales jumped by 3.8% in May from April, to $47 billion, but were still down by 3.0% year-over-year.
Seasonally adjusted, sales fell by 2.7% in May from April, but were down only 0.5% year-over-year.
Health and personal care stores (#8 category, 5% of total retail sales):
Sales dipped by 0.1% in May from April, seasonally adjusted, to $39 billion, but were up by 7.8% year-over-year.
The three-month average shows the trend beyond the month-to-month squiggles. It ticked up 0.2% in May from April and rose by 8.6% year-over-year.
Note the weakness in late 2024 and the big drop in early 2023. And the longer-term trend continued:
Clothing and accessory stores (#9 category, 4% of total retail sales):
People are not cutting back on buying clothes; on the contrary. Sales jumped by 0.8% in May from April, seasonally adjusted, and were up by 3.7% year-over-year.
The three-month average jumped by 0.6% in May from April and was up by 4.9% year-over-year.
Note that these are clothes bought at brick-and-mortar stores, and not online. Clothes bought online are part of ecommerce sales above.
Once we look at these nuts and bolts… we see that consumers are buying goods at a good clip, and they’re not suddenly cutting back. And it makes sense. Employment growth has been solid, unemployment has been low, wages have risen at a good clip, and consumers have accumulated trillions of dollars in interest-earning cash in CDs and money market funds waiting for a place to go. The mood may be ultra-sour, but the spending on goods goes on.
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I am not sure all people are sore, maybe it is just the media spin. Or maybe the unhappy people just need a good nights sleep.
There was a constant barrage of ads for Memorial Day mattress sales. Those unhappy people could have gotten some bargains and maybe some pleasant dreams.
I can’t wait for the Unhappy Fourth of July sales.
The sentiment is so sour and has been since COVID and then inflation. Doesn’t seem to matter who or what is in charge.
“Or maybe the unhappy people just need a good nights sleep.”
Maybe because of something *not* on this list – the cost of housing.
When inflation erodes people’s savings/thin margin of safety, they get scared/upset/pissed.
A cohort of Americans may be propping up retail sales even as another large cohort has been priced out due to their exploding rents (relative to 2020).
People don’t forget their financial rogering simply because the worst of it occurred in the past. It literally and figuratively has remained with them.
In the US, the top 10% of earners are responsible for nearly half of all consumer spending. Specifically, they account for 49.7% of all spending, according to data from Moody’s Analytics. This is the highest percentage recorded in data going back to 1989.
According to Moody’s the rest of us, those in the 90% bracket, not spending so much possibly….
Thankfully, they’re spending so much money. You’d complain if they’d cut their spending. But you know, flying in a private yet is more expensive than flying economy class. Buying a $200,000 exotic car is more expensive than buying a $40,000 car. They’re spending a lot of money on expensive stuff. I just read a headline, which I cannot unsee though I tried, about a $450,000 kitchen renovation. Some people are just nuts, but OK, they cannot take it with them, it helps the economy, creates jobs, and keeps the dollars flowing.
I lived and worked in Latin America when inflation was 100 + percent a year. We bought most any asset, even before we got paid, because we knew the price would be higher next month and we could probably sell it later at a ‘profit’. Perhaps Americans are catching on to this concept early.
It used to be common wisdom that if you held off on getting your social security payment until your late 60’s it was more beneficial in the long run, but that is really late 20th-early 21st century thinking now.
At 2-3% yearly inflation driven by services? Yeah I’m sure lots of people are doing that…
Yes, it’s better that, if wealth is going to be so concentrated in the hands of a few, that they spend it and keep the economy going. But it’d be better if wealth wasn’t so concentrated in the first place.
@Wolf in Presidio Heights, Hillsborough and Atherton $450K is “just a little above average” for a “full” (down to the studs) kitchen remodel (and “below the average cost” for a kitchen remodel that includes making the kitchen bigger by moving an exterior wall). It is crazy how expensive “everything” is getting. In college my monthly cable bill was just over $12 it is pushing $400 at the cabin today. You no longer get an “exotic” car for $200K and will spend more than that for a new 911 GTS (a new Turbo S or GT3 will be close to $300K). To have an “exotic” you need to spend over $300K on a McLaren, Lambo or Ferrari.
Vehicle sales will sure be heading down quite a bit in the months ahead as shortages of rare earths and tariffs start fully impacting supplies.
There is a lot of clickbait garbage about this in the media. That stuff is just funny. For entertainment only. Take it seriously at your own risk.
Actually read the articles on this site rather than uncritically posting clickbait “news” and CCP propaganda like you usually do.
Unless someone gives me an incredible deal on a restored 1968 Charger, or my 2008 Chevy diesel pickup dies before my 350k miles target, the auto sector is never getting another buy from me again. I did pick up a used golf cart recently that will likely drop my driving miles to ~20/week EC-vacations.
Speaking of that, I read the other day that “staycations” are becoming a “thing” again this year. Though the article also noted many saying they were willing to go into MORE debt for a vacation they could not afford. Our drunken spenders just won’t quit I guess.
All I know is I’d hate to be in the lower half of the country earnings or savings-wise, and I’m happy both my kids got excellent jobs with high wages.
Wolf, lots of prognostications out there on the future of AI as affords job elimination. Where are your thoughts now?
They’ve been writing “staycation” articles forever. It’s gonna kill tourism any time now. In the end, people still travel.
We just came back from vacation (Yosemite, Lake Tahoe), and there were lots of tourists, but it wasn’t the nightmare that we had seen a year ago. A year ago, the world had gone nuts in terms of tourism, and people couldn’t even get INTO Yosemite. The entrance was backed up many miles with a line of cars that didn’t move because the valley was full, and there was no more parking, and no one could go anywhere. We saw this over Juneteenth. This caused the NPS to institute a reservation system to get in. The system works pretty well, it was easy to use, and it’s keeping the crowds down to a manageable level. Parking was still hard to find, for example near the Mist Trail on Friday, and we had to park over a mile away. And the trail was still crowded. We didn’t even see it over the weekend.
Memorial Day Weekend was the busiest in history in terms of screened airline passengers… 13.6 million (TSA). So people are still travel-nuts. Staycations are for others and for articles.
Simply more people maxing out their credit cards before they are forced to file bankruptcy.
My wife recently traveled to the USA, And then across the country. The airline travel experience was sh*t, she resolved to never again visit the USA. Foreign airlines not so bad, but not what they were 5 years ago.
They don’t allow water through security, so they suggest bringing an empty water bottle and filling at the “stations” provided. In every airport, the station was extremely difficult to access, and they were filthy. Better to spend $7 for a bottle from a kiosk instead of endangering one’s health with fluoridated, chlorinated water from a filthy tap.
If you base your opinion on travel by a trip to Yosemite, you don’t have a clue. Take a couple of flights, pay for some hotels and hotel meals, Spend hundreds on taxis, vans and other ground transport. smoke that credit card and see some reality.
A year ago a friend bought a beer and a glass of wine in an airport bar. He sent me the receipt, $42.
I’ve taken lots of flights, including to and from overseas, and I’ve lived overseas, and I’m surprised you’re surprised that you cannot take a full bottle of water through security. That rule has been in effect for many years.
Transportation in the US has always been 3rd world compared to Europe and Japan. It is just something to be endured. Airline travel is especially horrendous due to the lack of infrastructure investment. But it is much cheaper than driving unless you’re hauling 3 or 4 kids.
My theory is that the reason service in the US is amongst the worst in the world is because even our “poor” people are rich enough to be able to fly and stay at the Hilton, so companies price to include these people. Some of them have no class, treat the staff poorly, staff gets burnt out and treats everyone like crap preemptively.
Whether my theory as to why is correct or not, service in the States is atrocious. (I have different reasoning for restaurants).
Good. Don’t come back lol
A couple of my favorite places in the US! If my joints didn’t hurt so much Tahoe or S of Reno is where I’d live for sure, but the cold hurts.
Might I add, if you have yet to do them the Nat’l Parks in Southern Utah are also incredible. Moon has a travel book on the Southwest thats great for the novices to the area. The best time to visit is late September through October when the heat is abating and the families are all back to school.
I did some last year, and most during Covid by motorcycle when everywhere was a ghost town.
Always great info
You mentioned this with gas but not other retail. Seems prices(inflation) is way up from a year ago. If dollar sales are up ~2%, doesn’t than mean people are buying ~ 5% less stuff?
Nonsense. Goods prices are NOT up.
1. CPI durable goods: 0% YOY
2. CPI nondurable goods: -0.1% YoY
That’s what retailers are selling, durable goods and nondurable goods. Retail sales do NOT include rents, insurance, auto maintenance, healthcare services, etc. Those are services, they account for 66% of CPI, and they’re not included in retail sales, and you cannot apply the CPI for services to retail sales. You have to apply the CPIs for goods to retail sales.
I wonder how much home (lack of) affordability contributed to this. As in I can’t spend money on a home so I’ll spend it elsewhere.
This is an interesting and good point.
1) Can only raise half of absurd required down pmt for insanely inflated house.
2) F- it.
3) I’ll use inadequate down payment funds to move up from store brand peanut butter.
4) Wolf notes increased retail sales.
Sounds like sarcasm but I mean it sincerely.
It’s called “doom spending”. The fact that there is a name for it must mean it’s real.
I was out mowing the lawn the other day when some Millennials walked by and snickered about it being “chore day”. I think this is what they say to themselves to feel better about not being able to afford to buy a house (and then go and blow all their money on lattes or whatever) – that they’d rather free up their time to binge watch garbage rather than have a lawn to mow.
I think there is something to that. Are bars and restaurants packed with younger people, often without families, simply because they’ve given up on the idea of homeownership and saving for the future, and would rather live for the moment? I don’t know, it’s a sociological question, not an economic one.
@TSonder305 With hundreds of tenants I talk to a lot more people about housing than most people and the number of people telling me that they have no plans to ever buy a home (or have kids) has been increasing every year for the past 20 years. I don’t blame them since things in the Bay Area are just crazy. I recently looked and in the town I grew up (where homes cost ~$20K in the early 60’s) in there were only three homes on Zillow under $2mm (and they were all under $1,500sf)…
A lot.
I supervise a lot of young people at my job (under 30) and they’ve given up on home ownership and firmly believe the system threw them overboard. So they just rent and spend everything they make (most of them at least). A few are still saving and holding out hope that they can one day afford a house but they are rare.
We live in SD and right now you’d need $250K to $300K in cash to get 20% down on a crappy house in the NE suburbs. How would anyone under 30 save that amount? So they figure why bother trying and just spend. Can’t say I blame them.
It does seem a bit more extreme these days, but on the other hand I can remember complaining about the same thing to my father 30 years ago.
Financial Repression – low interest rates – are a signal to people that they must save more, much more. People convince themselves that savings is pointless, but it also happens that, that is a pleasing message to hear and suits our natural inclination.
You can say, it’s hopeless, I give up, why save, but if you don’t save you deprive yourself of any chance to act when circumstances present you with an opportunity.
If rates stay at the current, more normal rates of 6% or 7% for 30 year fixed, prices will come down. People are holding out now, refusing to believe they missed the top. Determined to get that big payday – holding that 350k house until the get the 600k they are sure they “deserve”. But eventually – they can’t hold – they still have a mortg. They lose their jobs or they want to get on with their move or whatever.
Prices will decline – a lot – but if you have not saved – even when all the incentives are against you and self-indulgence passes for wisdom in our culture – the chance comes, they will not be able to move on it.
Well said. I also think that our culture has changed, and younger are not marrying early, kids later in life. This is not all about affordability. Its a multi faceted issue. And just maybe they don’t want to mow a lawn!
Excellent article. I’m a bit nervous about the impacts of the growth of Buy Now Pay Later. Some statistics I’ve seen suggested that Gen Z’s use BNPL for up to a third of the purchases. Everything from fast food to groceries.
The question is how much of this sales growth that we’re seeing is fueled not only by traditional debt but also BNPL?
BNPL is just credit cards with less regulations.
On my little corner of the internet, BNPL orders continue to be a tiny % of our overall order volume.
BNPL is just the modern parlance for “credit,” right?
The Diner’s Club card probably seemed like insanity to our grandparents. Now people think I am an idiot… because I don’t use a credit card.
BNPL is probably better than a lot of credit cards, as there’s many plans with no interest, ever. I also assume that people will… pay later?
The ultimate position on BNPL is puts on poor people.
@Wolf I wonder what these charts would look like if adjusted for inflation.
The same or better, lol
Inflation is in services, not goods, but retail sales are sales of goods not services.
1. CPI durable goods: 0% YOY
2. CPI nondurable goods: -0.1% YoY
That’s what retailers are selling, durable goods and nondurable goods. Retail sales do NOT include rents, insurance, auto maintenance, healthcare services, etc. Those are services, they account for 66% of CPI, and they’re not included in retail sales, and you cannot apply the CPI for services to retail sales. You have to apply the CPIs for goods to retail sales.
I was assuming the 10% inflation bump is what’s showing on many of the graphs as a step up after the pandemic. Oil is in deflation mode until recently, apparently .
Patch: After 55 Years, Frito-Lay Shuts Down IE Plant, Lays Off 432 Workers
RANCHO CUCAMONGA, CA — A long-standing Inland Empire snack-food era has ended. More than 400 Frito-Lay employees were laid off this month from the company’s Rancho Cucamonga plant amid the site’s permanent closure.
The plant has been a major employer in the area since it opened in 1970. In total, 432 employees were permanently let go from the facility located at 9535 Archibald Avenue, according to state filings. The effective date posted by the state was June 11.
The Rancho Cucamonga facility is not the only Frito-Lay plant impacted by cuts. Earlier this year, the company shut down a New York plant, resulting in 287 job losses. Another 56 jobs were chopped at a Maryland warehouse.
PepsiCo Foods U.S owns Frito-Lay. In a recent earnings call, PepsiCo Chief Executive Officer Ramon Laguarta said the company was “right-sizing the cost” of its snacks division after disappointing first-quarter numbers.
Some of the snack brands under the Frito-Lay umbrella include Fritos, Lay’s, Doritos, Cheetos, Smartfood, Stacy’s, and Tostitos.
I’m surprised ANYONE still eats their stuff. It’s just super-unhealthy junk. And not even cheap. If you’re going to sell unhealthy junk, at least make it cheap. Their cost of ingredients of a bag of classic Doritos — including Yellow #6, Yellow #5, red #40, sugar, salt, vegetable oils, and “natural & artificial flavors” — is in the single-digit pennies.
What are the marketing costs tho?
Doesn’t Yum brands own them?
1. American tradition
2. Cross promotions at Taco Bell and other Yum places.
3. Cheap fast quick and easy
No one wants Aldi brand knockoff Doritos tbh
Pepsi owns them.
“Aldi brand knockoff Doritos” are the same Doritos, just sold under an Aldi’s brand name at a cheaper price. The gross margin on Doritos are outrageous, and selling them at half the cost at Aldi’s just makes them less outrageous (but still outrageous). The benefit to Pepsi is increased total profit while selling to a more cost conscious consumer while elbowing out competitors. Pepsi knows that most Americans want to publicly unpack their Doritos in front of their neighbors so they can see how wealthy they are by not having “Aldi brand knockoff Doritos”.
No breath is worse than Dorito breath.
“Their cost of ingredients …”
And surely SFH construction costs trebled even as their prices did…
I know which one (Doritos, housing) I’m more pissed about.
1. They need the massive profits buy lobbiests on K Street.
The junk food they make is the scandal of our times.
After NAFTA was past, Mexico got an introduction to American toxic junk food.
God speed Mexico.
2. As a lifelong perma bear, your article made me cry. I prefer doom & gloom in all economic analysis.
I’m too old change Wolf.
It just seems like the bond bull is dead. How can markets still rocket higher? How can retail hold out for much longer without Mr. Helicopter money QE Bernanke?
Here in Petaluma, the California aristocrats continue to buy $100 pizza’s. The city is booming with economic activity. Not me. I’m a party pooper. It’s a rip off to me.
“Doritos”
The funny thing about gradually quitting such food is, while allowing yourself a bag every couple weeks-months, is how you *expect* them to taste better and be more satisfying even after they’re not. This, because we remember them being so.
I never threw away an empty bag in spite of the eventual, mild revulsion!
[edit]
*a bag that wasn’t empty
I’ve never been a fan of the “Doritos” with fake colors and flavors but liked “Tostitos” (as a chip side with Mexican food). We now buy the (more expensive) “Simply Tostitos” with Acocado oil (after workign hard to get all seed oils out of my diet).
@ApartmentInvestor
“We now buy”
Funny how healthier snacks cost more across the board. :)
I’d say it’s all about knowing the value of foods and trending to healthier choices while recognizing the difference (without obsession).
It may have been an article about the advent of the “Cheetos Duster” that pushed me towards this epiphany. One commenter summed it up: ‘what fresh hell is this?!’.
I am not going to lie, Tostitos are my favorite tortilla chip. You made me look at the ingredients; only three corn, oil, and salt, although still unhealthy. I never pay full price. They are always on sale at Smith’s if you buy 4 at a time.
As Wolf says often about other things price fixes everything. I do consume some Frito Lay stuff or used to do so. The price increases on their snack stuff has been outrageous recently. Cost of ingredients is not much vs retail price. I can see they might go up for all the plants, people and marketing. Maybe they are doing too much marketing if that is a big part of it. I walk by it in the grocery store, and remember buying it, but not anymore. The whole thing about such snacks was cheap bulk junk food. Who the heck wants to pay so much for junk food?
Plus regular downsizing in the size of what they sale the last couple years. It not only has gone way too high in price the amount you get is lower. I marvel that they sale as much as they do at these prices, but am not surprised they are having to shut down plants.
If you want to see the numbers and charts, Wolfstreet is the place. Do you ever sleep?
Re: Sour mood + “ Consumers are not backing off from doing stuff they want to do”
That combo has a pandemic vibe — maybe a bit of revenge spending, but certainly, a you only live once attitude — or a “Devil-may-care” nonchalant feel.
That helps explain many things, like stocks going up into a potential insane war, with nonstop crazy geopolitical dynamics and heightened domestic chaos — having virtually no economic reaction.
I think what we’re experiencing today, is far more stressful and insane, than the early pandemic — and in that light, stock volatility is about normal and if anything, speculation is increasing, as uncertainty explodes.
Just as with YOLO, FOMO is connected to the drunken sailors spending more than ever — to me, this is massive hallucination bubble that feeds off a cult of stupidity.
These nominal trends looked great with Biden too, but this awesome hallucination is far less groovy, looking through the kaleidoscope of Advance Real Retail and Food Services Sales.
Far more stressful than early pandemic when we were shut in our houses and they closed down national parks and wouldn’t let you outside? Lol no
You just can’t beat burger prices from April 2020 to April 2021.
What a time to be a burger buyer! 🍔
Once some politician clearly distills the path of beef prices since 2000, America will have a revolution on its hands.
More and more, faster and faster steak is receding from American memory due to price inflation.
While I’m very optimistic about my own situation- great career going, wife has a great career going, low expenses, no debt, plowing money into 401K, just sold a second home at a small profit, first home free and clear, I’m pessimistic on the opportunities for my kids and the younger generations. They don’t have pots to piss in and they’re overpaying rent to live barely above squalor conditions… at least all the young adults I know. (Neither do they seem to have much fire toward higher education or self-improvement) They’re captivated by gadgets and screens, and don’t even care they can’t drive a car into their 20’s. All this tech is changing humanity for worse. We are getting dumber as a species every time a parent gives a kid their first phone, and sales is driven more and more from the targeted advertising – curated content based on invasions of privacy which the phone user agrees to in the fine print they “Accept” in order to use the device in question. So yes, retail sales are chugging along, tariffs or no, but I still have a foreboding sense of doom around the corner- not based on media, based on having been alive 58 years and observing what’s happening. Chaos is unsustainable. I posit: something systemically important is about to fail, and it will cascade before it can be contained, and the people in charge are inept at everything except divisive propaganda, lies, and swindles, especially at the very top.
So you’re successful and wealthy, and all you contribute to improving things is complaining about other people?
Time to devote yourself to community service or politics to solve the problems you complain about. You seem to have the economic security and good fortune to be in a position to do so.
As noted above, “In the US, the top 10% of earners are responsible for nearly half of all consumer spending.”
The huge stock and real estate market gains went to them and I expect that’s where lots of the spending is coming from. There is a lot of cash floating around the system now too and with boomer retirees fresh out of the gates it will likely continue for awhile yet.
That being said, there’s always a potential black swan event but as we’ve seen the last decade or so dip buyers have lots of cash still along with the corporate buybacks (with record profit margins) that support the whole schpiel.
You said it, Brother.
I am younger than you are (born in 1972) and I feel the same way.
If I had to put a number on it, I’d say America peaked in the late 90s. But I’m sure everyone has a different idea on this.
The rising sales trend of food service and drinking places is relentless. I suspect a lot of people are having more take out delivered to their doorstep via DoorDash and other delivery services. People seem to spend a lot of money on convenience these days…a lot more than I would have ever imagined.
“People seem to spend a lot of money on convenience these days”
Things had definitely gotten insane by the time out-of-house food spend (inherently much more expensive) surpassed grocery food spend.
The level of time starvation out there is incredible.
A measure of America’s monumental economic collapse since the 1950’s:
4 person families survived well on a single income in 1955.
In 2025, 3 person families barely survive on *2* incomes.
What progress.
I think young people may actually make more money, adjusted for inflation, than they used to. Then they waste it because they’re too lazy to cook, too lazy to learn, too lazy to even go pick up their own food. All so they have more time to waste watching TV and getting depressed thinking about the meaning of life, doing social media and getting weird because of it…
I know a lot of them do have it tough, but it’s hard to not see the above and be disgusted at all the whining about being poor.
@MussSyke you are correct that WAY less young people cook today but even if they grew their own food and never ate out in most of the US it is WAY harder to get ahead today.
In the early 60’s when my Dad (who didn’t go to college) bought a home for 22K (3.7x his income) he was making about $6,000/year (a little over double the CA “minimum wage” at the time of $2,600/year. Like most wives with kids in the 60’s my Mom didn’t work.
Zillow says my parents first home is worth a little over $2.6mm today and not many guys in their 20’s that didn’t go to college are making over $700K/year to have the same 3.7x income to home price ratio as my Dad in the 60’s.
The $25 breakfast (with tip) is alive and well, and before I get the brickbats telling me to make my own brekkie, its notoriously difficult to do so when you’re on the road staying at a motel.
That is why so many restaurants are going out of biz now, they’ve outpriced themselves.
25 just for yourself??? If so what the hell are you eating.
And even on the road you can still go to a grocery store and buy some bagels and cream cheese.
An omelet and a cup of coffee is around $19, tax is a few bucks and $3 for a tip and there you go.
There’s a reason Denny’s has closed so many restaurants along with many other chains pulling back.
And yeah, no thanks on going to the store to buy a bagel I can’t toast and I’m not fond of cream cheese either.
Better yet, walk into a big brand name hotel and eat the complimentary breakfast free of charge!
Enjoy the complimentary paper too, smile at the staff and enjoy the experience.
@Eric86 we were in Carmel for a wedding last month and (with tip) breakfast (at a hip breakfast place downtown) for three was over $100…
So find a hotel with a comp breakfast?
You have about a million different options but are choosing the most expensive one lol
Its nice to go out for a meal and live like a drunken sailor and not sweat the small stuff~
The best kept secret is the Chinese deflation which persists even while the zone is flooded with liquidity of the Chinese currency.
The cheek of Lagarde to suggest that the flawed euro, priced in dollars, should become the reserve currency.
The French are french which manifests itself in weird fantasy that they make a difference. The Euro is a trash currency, hardly suitable to replace the dollar.
I expect the Fed to stand pat tommorrow. Awaiting the wave of inflation that is normally associated with the imposition of tariffs, which will decrease the profit that the merchants accumulated. A class, that Adam Smith cautioned us to never trust.
I have come to the conclusion that the MAGA crowd. as they celebrate their own impoverishment. Let it happen. I guess.
Stupid is as stupid does.
I don’t believe either side celebrates their own impoverishment. They just view it via different lenses. The swing from party to party indicates a deep unhappiness in the electorate with the status quo, however those swings never bring the relief the lower 90% seek.
The Congress, under both parties, have acted as reckless spending fools, with the Fed enabling this behavior for quite some time. No one from either party can right the ship in any sense of a shorter duration, and to try to massively cut spending would also massively slow growth and consumer spending. As a result, debt would immediately soar.
The left blames the right, the right the left. Buffet had it correct when he (paraphrased) said we could fix DC funding by not paying Congress unless they pass a balanced budget. Of course Congress would never agree to as much. 🤣
AFAIK there is only one way to right this ship, and it requires a combination of 1) slowing growth of spending, 2) entitlement reform, 3) on-shoring or near-shoring jobs and industries (begun under Biden, continuing under Trump, 4) dollar “devaluation”, 5) modestly higher inflation for longer, 6) possible revaluation of gold to improve the balance sheet, 7) higher taxes on the wealthy, 8) less social program spending (cutting the fraud in fake “disability” payments a good start), 9) military spending reform as well as ending continual wars and world policing, and 10) zero-based budgeting with no more omnibus bills and pork-barrel hidden programs. (Likely more). And if ALL that could be accomplished, we might “glide path” towards <100% debt/GDP. *might*
You tell me who is going to accomplish that in one go around?
No one’s doing any of that. It’s a kleptocracy, not a democracy. If they do give a legit try the lack of competence ensures it fails.
Great comment!
Well remember the birth of baseline budgeting.
You clearly have no idea what you are talking about and have not read the articles here. There is so far and likely will be no inflation from the tariffs. If anything, they are disinflationary because they lower the insane federal deficits we are running. You people get really upset when corporate profits are cut into, though.
Yep, still no sign of meaningful inflation from tariffs.
That has to be a real mind-bender for everyone who took AP Econ or Econ 101 as gospel, and thought their professors were actual experts.
Academic economics almost always fails to fully consider all the second-stage unintended consequences and side effects. No real-world change occurs “with all other things remaining equal”. The studies I’ve read about indicate that except where an (illegal) monopoly exists, or where demand exceeds supply at pretty much any price, the real world cost of tariffs does not fail much on the consumer. Tariffs in the real world appear to be primarily a tax on corporate profits on overseas production.
As far as I see, there is one possible framework with UK that isn’t an official treaty — so, the concept that there won’t be inflationary impacts later in the year is unrealistic.
Nonetheless, the disinflationary impacts from global China exports might help buffer tariff uncertainty, but, the overall uncertainty in all this, is not in any data yet.
However, the chaotic tariff policies and a substantially larger deficit are not going to increase GDP —- especially Real GDP!
If the FED holds policy steady, then consumers will just change the allocation of their funds.
Reasonable to say that we have moved toward a historically average economy, rather than the boom times of the past 10 years, and we are confusing an average economy for a downturn?
Howdy Folks. At a recent Squirrels Anonymous Meeting, Sober Sailors were upbeat saving a little more $$$$$ for that big purchase later in life.
Party on no matter what comes.
Oil prices have stopped declining and started rising again, due to the Israel-Iran war.
Since gasoline demand is inelastic, retail sales will get stronger as people buy the same amount of gas at higher prices.
And inflation will tick up in months ahead for the same reason, unless it’s offset by something else.
I am wondering if we can determine the spending by income level. I believe that the spending is being supported by the sky high stock and asset values causing a false sense of security.
Unemployment is low, but I do not know if it includes people who did not find a job in 26 weeks and dropped off of the UI rolls. I am one of those unemployed software professionals.
1. It doesn’t matter one iota to the economy who does the spending. Get used to it.
2. If you want to read about social justice, you’re in the wrong place.
3. Your last statement is nonsense and shows that you don’t know what you’re talking about. The unemployment rate has nothing to do with Unemployment Insurance (UI). The unemployment rate is the number of all unemployed as per the Household Survey divided by the number in the labor force as per the Household Survey. UI is state data on people getting UI, and it doesn’t go into the unemployment rate, and whether anyone falls of the list after 26 weeks has zero to do with the unemployment rate.
There’s a weekly report that comes out every Thursday (except holidays) showing new weekly unemployment-insurance claims, and continuing claims. It’s possible to fall off the “continuing claims” when the unemployment insurance runs out. But you’re still unemployed.
But the “unemployment rate” comes from a different survey, which attempts to measure how many people in total are “unemployed” or “working part time for economic reasons” or “not in work force” or any of a few other categories. To be counted as “unemployed” in that survey, though, you have to be actively looking for work. If you’re not working or actively seeking a job you’re treated as “not in work force”. You might feel differently from the government about that approach.
To assess the overall health of the labor side of the economy, analysts and folks like Wolf look at both the “unemployment rate” and the “participation rate”. The participation rate is the fraction of people actually working. If you’re not employed and not looking for work, you might not count as “unemployed” but you’d be lowering the participation rate, and that does get noticed when it’s droopy but doesn’t generate as much attention as people looking for jobs and not finding them.
Nothing’s changed in 100 years. The distributed lag effect of monetary flows, the volume and velocity of our “means-of-payment” money supply, the proxy for R-gDp, is a mathematical constant. There’s no possible deceleration until year’s end.
01/1/2025 ,,,,, 0.057
02/1/2025 ,,,,, 0.057
03/1/2025 ,,,,, 0.076
04/1/2025 ,,,,, 0.074
05/1/2025 ,,,,, 0.066
06/1/2025 ,,,,, 0.061
07/1/2025 ,,,,, 0.055
08/1/2025 ,,,,, 0.043
09/1/2025 ,,,,, 0.021
10/1/2025 ,,,,, 0.022
11/1/2025 ,,,,, 0.029
12/1/2025 ,,,,, 0.005
But that’s without extrapolating the data, so no recession this year.
I’m just curious. Is it the storm before the calm?
Retails sales should always trend up unless there is a recession. The FED mandate is to always have inflation so retail prices should always go up.
People may be spending more money but they may not be buying the same amount of stuff.
Somethings can be overpriced in the short term like housing, but it will eventually go up.
That’s not true. Prices of many manufactured goods tend to go down due to efficiencies in manufacturing. Much of what retailers sell are manufactured goods. They don’t sell services. Inflation has been in services (rent, insurance, healthcare, education, communications, movies, etc.) — but retailers don’t sell them.